While purchasing a policy, it is very important to compare life insurance policies online and understand the process of premium calculation of different types of policies. As we have earlier mentioned, there are various factors that determine the premium rate of a policy. One’s age is the most important factor that plays a vital role in determining the premium amount.

The premium amount rises by 8-10% every year due to the increase in the insured’s age. So, it is always beneficial to purchase an indemnity policy while one’s young. If the insurance buyer is young, the premium rates of the policy will be low when compared to the premium rates for someone older. This is because young individuals tend to be less prone to life-threatening diseases and the possibility of death at such a young age is very unlikely. Moreover, purchasing a life insurance policy at a young age can help the insured save a lot of money in long run.

As a person grows older, the life expectancy of that person decreases, thus, they become riskier to insure. Rather than increasing the premium of the policy on every birthday of the insured, the insurance company spreads the premiums one would pay over 10, 20 or 30 years depending on the entry age of the insured and averages them into one amount. So, the premium amount paid by the insurance holder remains the same every year. However, the rate increases every year by 5-8% if an individual is in his/her 40s and 9-12% if an individual is above 50 years of age.

If a person waits to buy life insurance at a later stage in life, then he/she loses out on the earlier, low-risk years that lower the average and end up paying more. Besides this, purchasing a life insurance plan at older age can also lead to more hassles during the process of application. The insurer might ask the insurance buyers to do extra tests like EKGs and cognitive testing for dementia before purchasing the policy.

However, paying more for indemnity policy does not disqualify an individual from actually getting it. It just means that the insured will have to pay a little extra every month. Having said this, paying a little extra in order to safeguard the future of your loved ones is wiser than not having a protection plan.

Moreover, there are many life cover policies that are designed to cater the requirements of the individuals in their sunset years. These types of life inurance coverage policies may cover accidental death or final expenses that specifically cover burial/cremation costs.

In case of guaranteed whole life insurance, the insured does not have to undergo any medical tests and may be covered for a higher sum assured. This type is specifically designed to protect the family of the insured from the burden of paying for the final expenses. For those life insurance policies that provide accidental death insurance, age is not a factor for the insured, plus they don’t have to undergo any medical tests. However, coverage against accidental death can only be provided to the insured if they have taken accidental rider benefit along with the policy.

Age is the key factor to consider while zeroing on a life insurance plan. Young individuals who have a good medical history and have taken their first steps into a married life, should definitely consider purchasing a policy as it provides life protection to the family of the insured at a low premium cost.